Gannett Adopts Shareholder Rights Plan Designed to Protect its Net Operating Loss Carryforwards and other Tax Assets
April 07 2020 - 6:45AM
Business Wire
Gannett Co., Inc. (“Gannett”, the “Company” or “we”) (NYSE: GCI)
announced today that on April 6, 2020, its Board of Directors acted
to preserve and protect the Company's valuable income tax net
operating loss carryforwards (“NOLs”) and other tax assets through
adoption of a shareholder rights plan in the form of a Section 382
Rights Agreement (“Rights Agreement”).
Gannett had approximately $435 million of NOLs available as of
December 31, 2019, which could be used in certain circumstances to
offset Gannett’s future federal taxable income. Gannett’s Rights
Agreement is similar to plans adopted by numerous other public
companies with significant tax assets.
Gannett’s ability to use these tax assets and others which may
be generated would be substantially limited if Gannett experienced
an "ownership change" as defined under Section 382 of the Internal
Revenue Code. In general, an ownership change would occur if
Gannett’s shareholders who are deemed to be owners of 5 percent or
more of its shares under Section 382 collectively increase their
aggregate ownership of Gannett’s shares by more than 50 percent
(measured over a three-year period).
Under the Rights Agreement, the Board declared a non-taxable
dividend of one preferred share purchase right for each outstanding
share of common stock. The rights will be exercisable only if a
person or group acquires 4.99% or more of Gannett’s common stock.
Gannett’s existing stockholders that beneficially own in excess of
4.99% of the common stock will be "grandfathered in" at their
current ownership level and the rights then become exercisable if
any of those stockholders acquire an additional 0.5% or more of
common stock of the Company. If the rights become exercisable, all
holders of rights, other than the person or group triggering the
rights, will be entitled to purchase Gannett common stock at a 50
percent discount or Gannett may exchange each right held by such
holders for one share of common stock. Rights held by the person or
group triggering the rights will become void and will not be
exercisable. The Board of Directors has the discretion to exempt
any person or group from the provisions of the Rights
Agreement.
The rights issued under the Rights Agreement will expire on the
day following the certification of the voting results for Gannett’s
2021 annual meeting of shareholders, unless Gannett’s shareholders
ratify the Rights Agreement at or prior to such meeting, in which
case the Rights Agreement will continue in effect until April 5,
2023. Gannett’s Board also has the ability to terminate the plan if
it determines that doing so would be in the best interest of
Gannett’s shareholders. The rights may also expire at an earlier
date if certain events occur, as described more fully in the Rights
Agreement that will be filed by the Company with the Securities and
Exchange Commission.
Additional information regarding the Rights Agreement will be
contained in a Form 8-K filing with the Securities and Exchange
Commission.
About Gannett
Gannett Co., Inc. (NYSE: GCI) is an innovative, digitally
focused media and marketing solutions company committed to
strengthening communities across our network. With an unmatched
reach at the national and local level, Gannett touches the lives of
nearly 140 million people monthly with our Pulitzer-Prize winning
content, consumer experiences and benefits, and advertiser products
and services. Gannett brands include the USA TODAY and more than
260 daily local newspaper brands, digital marketing services
companies ReachLocal, WordStream, and ThriveHive and U.K. media
company Newsquest. Following the completion of their recent merger,
starting November 20, 2019, New Media Investment Group Inc. trades
on the New York Stock Exchange under Gannett Co., Inc. and its
ticker symbol has changed to “GCI”. To connect with us, visit
www.gannett.com.
Forward-Looking
Statements
Certain items in this press release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are
based on management’s current expectations and beliefs and are
subject to a number of evolving risks and uncertainties. These and
other risks and uncertainties could cause actual results to differ
materially from those described in the forward-looking statements,
many of which are beyond our control. The Company can give no
assurance that its expectations will be attained. Accordingly, you
should not place undue reliance on any forward-looking statements
contained in this press release. Some of the risks and important
factors that could cause actual results to differ from such
forward-looking statements include, but are not limited to, the
difficulty of determining all of the facts relative to Section 382
of the Internal Revenue Code, unreported buying and selling
activity by shareholders and unanticipated interpretations of the
Internal Revenue Code and regulations, in addition to the risk
factors described in the Company’s most recent Annual Report on
Form 10-K filed with the Securities and Exchange Commission.
Furthermore, new risks and uncertainties emerge from time to time,
and it is not possible for the Company to predict or assess the
impact of every factor that may cause its actual results to differ
from those contained in any forward-looking statements. Such
forward-looking statements speak only as of the date of this press
release. The Company expressly disclaims any obligation to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Company’s
expectations with regard thereto or change in events, conditions or
circumstances on which any statement is based.
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version on businesswire.com: https://www.businesswire.com/news/home/20200407005268/en/
Ashley Higgins & Stacy Cunningham, Gannett Investor
Relations investors@gannett.com (212) 479-3160 or Media: Stephanie
Tackach, Gannett Public Relations stackach@gannett.com
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